UK Property Sales Reach an All-Time High, But For How Long?
New data suggests that overall UK property sales hit an all-time high in June following several months of unprecedented gains. However, market watchers are warning that we may be seeing the peak of the housing boom, which could be followed by a series of subsequent declines over the months to come.
Official figures from HM Revenue and Customs (HMRC) indicate a total of 213,120 sales and completions last month, that is more than double the number of completions recorded in May and the highest since records began.
Experts have spoken of the “frenzied rush” among buyers to take advantage of the temporary stamp duty holiday fuelling the sector for the first half of the year. Demand consistently outstripped supply, pushing property prices even higher to reach record highs in most regions of the UK.
In June, the total number of sale completions was 216.1% higher than the same month in 2020, and 108.5% above that of May this year.
While the figures paint a picture of impressive performance, speculation of a housing bubble burst is rife among analysts and economists. Some of which have pointed out that the effects of the stamp duty withdrawal are already visible.
An Inevitable Stamp Duty Slowdown
Jeremy Leaf, a London estate agent, said that while the market remains exceptionally active, there has been an undeniable slow down since the partial withdrawal of stamp duty relief on properties valued at £500,000 or less.
“These figures clearly illustrate the frenzied rush to the finishing line for buyers to take advantage before the stamp duty holiday drew to a close,” he said
“However, activity has reduced since, particularly in London where the savings were greatest. Early signs are that sales will be down significantly, but we have noticed nearly all of our transactions are continuing with very few re-negotiations. This leads us to believe prices will not be markedly different over the next few months.”
Buyers Advised to Think Long-Term
Speaking on behalf of Hargreaves Lansdown, personal finance analyst Sarah Coles discussed how inventory shortages have affected buyers’ purchasing behaviors.
“There’s been a huge imbalance between buyers and sellers during the spring and early summer, which has meant panic buying, bidding wars, and the return of gazumping,” she said.
Ms. Coles also warned those who may be considering overspending on a property in the current climate to consider the potential long-term implications of doing so.
“It’s also easy to feel you don’t have any other choice, so you end up pushing your budget and over-stretching your finances. Months down the line, you could seriously regret the lifestyle compromises you’ve had to make,” she added.